Canadian Insurer Buys Irish Life Group

Following a 2-year courtship, Great-West Lifeco has agreed to acquire Irish Life Group from the Irish government for $1.73 billion. Great-West, based in Winnipeg, Manitoba, began negotiating to acquire the firm two years ago but walked away from the deal due to the uncertainties of the European economy and banking crises, according to news reports.

“We thought Irish Life was a great property, we just wanted to bide our time as things improved,” Great-West chief executive officer Allen Loney told Toronto’s Globe and Mail newspaper.

The Irish government became the owner of Irish Life as a result of its takeover of failed Irish Life & Permanent, the country’s largest mortgage lender, which was taken over last year after it fell short of capital requirements in the financial crisis. A separate deal to acquire the company fell through in 2011. Although Irish Permanent required a government bailout, Irish Life has remained profitable.

The deal is expected to close in July. The Irish government is recouping the amount it paid for Irish Life Group, officials told Reuters.

Great-West said it will fold the Irish operations of its Canada Life subsidiary, which has operated in the country since 1903, into Irish Life. No layoffs are expected, Loney told The Globe and Mail. Jobs will be reduced through attrition.

The deal is the latest of several takeovers of troubled financial companies engineered in recent years by Montreal’s Power Financial Group, which owns a controlling interest in the Winnipeg insurer. Power Financial increased its activity in the U.S. market with its 2007 acquisition of Putnam Investments. It acquired Mackenzie Financial in 2001, and Canada Life in 2003.

Irish Life is Ireland’s largest life insurance, pensions and benefits company. It has assets valued at $37 billion euros under management.

The Canada Life Group is the largest Canadian employer in Ireland, with about 600 employees.

Great-West Lifeco is a financial services holding company that manages $546 billion in assets.